Top national 6-month CD rates hold at 3 1/2-year high

For the past two months we’ve enjoyed MySavingsDirect’s top return among nationally available 6-month CDs.

The online division of New York’s Emigrant Bank, which offers only a simple savings account and three CDs, pays a solid 1.05% APY.

Not only is that a full two-tenths of a percentage point more than the previous leader paid, it's the first time we’ve seen a national 6-month return above 1.00% since September 2011.

Indeed, with the exception of a few short-lived spikes to 1.00%, the top national yield had languished between 0.80% and 0.93% APY for nearly three-and-a-half years.

If you live in the right place, or work for the right employer, you might even qualify to buy a 6-month CD from a community bank or credit union that's paying as much as 1.74% APY (more on that later).

Of course, savers will never be able to earn 3% or more on 6-month CDs, as we did before the 2008 financial crisis and ensuing recession, until the Federal Reserve reverses its policy of pushing interest rates to unprecedented lows.

But the exciting news is that we could see that happen before a 6-month CD bought this month matures at the end of the year, making these deals a particularly savvy place to stash short-term cash while waiting to see what the Fed will do.

In addition, there are two 6-month deals that select savers living throughout the country can access:

Jersey Central Federal Credit Union is paying 1.11% APY on 6-month certificates with a $500 minimum deposit, or 1.21% APY if you can invest $50,000 or more. Membership is open to all Amtrak employees, regardless of where they live, and the employees of a New Jersey transit or railroad company.

Catholic United Financial Credit Union is offering 1.26% APY on 6-month CDs for nationwide members of Catholic United Financial, as well as Catholics living anywhere in North Dakota or belonging to select Minnesota parishes. A minimum investment of $200 is required.

As for what the rest of the nation’s 6-month CDs are paying, the national average return is slowly creeping upwards, yet still remains an unimpressive 0.17% APY.

According to our weekly survey of banks and thrifts, 6-month CDs sunk to a record-low average of 0.14% APY in September 2013, and sat there again in June 2014.

In stark contrast is the average from February 2007, before irresponsible mortgage lending led the economy over a cliff. At that time, the national average return for 6-month CDs was 3.50% APY.

By most historical standards, that’s a reasonable rate for savers to expect.

All of that was before the Federal Reserve stepped in to talk the markets off a ledge, though, by embarking on a path of holding interest rates down — for six years now — to allow the economy to rebuild to full capacity.

This week, the Fed’s rate-setting committee will assemble for two days to assess whether the timing is ripe yet for its first rate hike in almost ten years.

Although theoretically they could decide to raise rates at this meeting, it’s considered all but certain they won’t, with Wall Street placing odds most heavily on this fall or early winter for the first rate hike.

While we wait for that much-anticipated event, short-term CDs paying one of the country’s top rates can be a smart play for savers who want to be ready for higher rates as soon as they begin arriving.